Does India breach the WTO limit of permissible subsidy being within 10% of total agriculture output? Analyse (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
reign4518 4 years
Under Deminimis Provision of World Trade Organization's Agreement on Agriculture(AoA),developing countries are allowed to maintain trade distorting subsidies to level of 10% of total value of the produce.
India invoked peace clause for Marketing year 2018-19 :
India has invoked the peace clause of the WTO's AoA.This follows the country exceeding the ceiling of 10% on support offered to rice farmers in the marketing year 2018-19.The Government through a notification to the Committee of Agriculture,WTO on March 30th 2020,informed that the value of its rice production in 2018-19 was $43.673 billion,while its total support through different measures for rice farmers was $5.004 billion.The support for farmers thus comes to 11.46% of the value of production against the allowed limit of 10%.
Subsidy Calculations and Issues arise out of calculations:
While calculating the subsidies,India has take into account the subsidies provided through PM-KISAN and payment of relief for natural disasters(both being form of income support)which should not be considered.Thus their inclusion eventually lead to the breach of Deminimis provision and made Indian Government to invoke peace clause which will question our credibility on global platforms.
However,if India is able to justify its act i.e.invoking peace clause and come in consensus with the other member countries of WTO,helps Indian farmers a lot and upholds India's commitment towards multilateral agreements.
IAS Parliament 4 years
Good answer. Keep Writing.
